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Alibaba`s Gross Merchandise Value to Hit $1.2T by 2025, 55% More than Amazon

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While many Chinese companies have faced severe challenges and losses caused by the COVID-19 pandemic, Alibaba Group emerged as one of the country’s biggest corporate winners in times of crisis.

The multinational tech giant expanded its business significantly in 2020, as demand for its services and online marketplace surged amid the lockdown.

According to data presented by Aksje, Alibaba’s gross merchandise value is expected to continue growing in the following years and hit $1.2 trillion by 2025, 55% more than its biggest competitor Amazon.

Alibaba Group’s Revenue Jumped by 35% Amid Pandemic, eCommerce Platforms Hit 780M Users

Alibaba Group emerged as China’s leading eCommerce company after the 2003 SARS outbreak. Since then, it has become a significant hirer and a lender, providing more than 100,000 jobs and offering billions of dollars in loans to SMEs.

One of the group’s most profitable marketplaces is Taobao, responsible for more than 80% of its sales. Unlike Amazon, Alibaba isn’t involved in direct sales and doesn’t own warehouses; it simply helps branded manufacturers and small businesses to reach consumers.

Statistics show that revenues of the Chinese e-commerce corporation surged in recent years. In 2015, Alibaba Group generated $11.7bn in revenue, revealed the company’s earnings reports. This figure soared by 390% to $57.9bn in 2019 and continued rising.

In the fiscal year ending March 31, 2020, Alibaba reported around $72bn in revenue, a 35% increase in a year. Almost 70% of that value was generated through the domestic commerce retail business.

The company`s earnings report also revealed that last year gross merchandise volume jumped by 15% YoY and hit over $1 trillion for the first time. Taobao sales generated almost 50% of that value. On Singles Day 2020 only, online shoppers placed more than 2.3 billion orders on Alibaba’s Tmall and Taobao eCommerce platforms, surpassing US Cyber Monday sales.

The impressive growth of sales and revenues was fuelled by a surge in online shopping in Alibaba’s home market China. Due to less developed physical stores and cheap logistic services, the e-commerce market has grown rapidly in third-and-lower tier cities in recent years. Cross-border online shopping is also becoming a trend, as people are becoming more aware of international brands. Today, China has the largest number of online shoppers globally, almost 783 million in 2020.

The vast majority of them are using one of Alibaba’s eCommerce platforms. Statistics indicate the number of annual active consumers on Alibaba’s online shopping properties in China hit 779 million in December last year, up from 711 million in 2019.

Amazon’s Gross Merchandise Volume to Hit $795B by 2025

The surge in online sales amid pandemic also fuelled Amazon’s sales and revenue growth. The Future Shopper Report 2020 conducted and published by Wunderman Thompson Commerce showed 48% of global online shoppers choose Amazon as their preferred shopping destination for entertainment items.

Additionally, 37% of respondents preferred Amazon as their first shopping destination to buy toys and 29% for tech purchases.

In 2020, sellers on the Amazon marketplace sold $300bn worth of goods, $100bn more than in 2019. The total gross merchandise volume, including sales by Amazon itself and by the marketplace, hit almost $490bn.

Net revenue of the world’s second-largest eCommerce company jumped by 38% year-over-year and hit $386bn in 2020. Retail revenues accounted for 76% of that value.

Amazon`s 2020 annual report showed online stores generated almost $198bn in revenue last year, up from $141.2bn in 2019. Third-party seller revenues also spiked amid the pandemic reaching $80.5bn in 2020, almost a 50% increase in a year. Only psychical store revenues slipped to $16.2bn, compared to $17.2bn in 2019.

The Edge by Ascential projections for 2025 show Amazon’s gross merchandise volume is set to continue growing in the following years and jump to $795bn, $405bn less than the leading Alibaba Group. Walmart would rank third, with $644bn gross merchandise value.

Pinduoduo and JD.com are forecast to hit $611bn and $462bn in GMV by 2025 and rank fourth and fifth on this list.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Flutterwave, 9PSB Partner to Boost Growth of Inclusive Financial Services in Nigeria

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Flutterwave, Africa’s leading payments technology company and Nigeria’s very first payment service bank, 9PSB on Monday entered into a partnership agreement that will help facilitate seamless financial services for Nigerians.

In a joint statement issued by both companies, the partnership seeks to create a seamless payment ecosystem by aggregating and simplifying transactions for banking agents, merchants, and consumers.

The partnership will also support the drive for economic growth through empowerment of the SME sector, entrepreneurs in FinTech and other industries, as well as contribute to the transformation of the informal sector to formal.

Speaking at the MoU signing ceremony, held at the 9PSB head office in Lagos, the Chief Executive Officer, 9PSB, Branka Mracajac remarked that the collaboration between 9PSB and Flutterwave represents an important milestone in making banking services accessible to all.

According to her, the partnership supports both companies’ commitment to expand accessibility and serve as last-mile delivery of solutions to the unbanked, under-banked and underserved. She said, “9PSB, being focused on the presence in unserved, rural, and remote areas, has a unique business model that provides Agent Banking as a Service to our partners to drive financial inclusion. Expanding on our promise to deliver relevant products, with this partnership, our existing agents, partners, and customers will have a single point of entry to enjoy various products and services provided by Flutterwave.”

With this partnership, Flutterwave and 9PSB are jointly launching a suite of products to enable other corporate entities, FinTech, technology and other industries to take advantage of the robust end-to-end system available for payments, collections, and transactions for both the banked and financially excluded Nigerians.

Commenting on the choice of 9PSB as its settlement bank, Founder and CEO, Flutterwave, Olugbenga Agboola noted that both companies share the same vision and are committed to one goal of powering seamless financial services. “At Flutterwave, we believe in an ecosystem of shared value that transforms and impacts society. We are showcasing the power of strategic partnership and cross-sectoral collaboration in advancing Nigeria’s financial ecosystem,” he said.

A paper published by the CBN—Financial Inclusion in Nigeria; Issues and Challenges, admits that there is global consensus on the importance of financial inclusion due to its key role in bringing integrity and stability into an economy’s financial system as well as its role in fighting poverty in a sustainable manner. The partnership between 9PSB and Flutterwave keys into various calls for interconnectivity and interoperability amongst stakeholders in the financial sector in accelerating the country’s financial inclusion drive to create prosperity and grow the economy.

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HealthPlus Launches Digital ePharmacy and Access To Doctors

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HealthPlus Limited, the largest and fastest-growing pharmacy chain across West Africa is set to revolutionize the pharmaceutical industry with the launch of Nigeria’s first ever e-Pharmacy. Nigerians can also now access a doctor or pharmacist instantly at a click.

Through the digitization of the Pharmacy and retail services, HealthPlus will now be transformed into a fully automated one-stop shop for Pharmacy Services Telemedicine Services Laboratory Services and, Beauty Consultation Services.

From the fully automated and interactive website, Nigerians can now access all the pharmacy services and consult a doctor right from the comfort of their homes or a click from their mobile phones.

According to Chidi Okoro, Chief Transformation Officer of HealthPlus Nigeria Limited, “we noticed a significant surge in online Pharmacy orders, and many customers organically resort to purchasing medicines online and getting them delivered at home. It is now considered not just the more convenient option, but the safer option as well.”

HealthPlus’ first-ever ePharmacy is in response to this shift and give Nigerians quicker access to the country’s best pharmaceutical care,

HealthPlus’ ePharmacy aims to deliver a user-friendly, all-inclusive online experience, that provides access to professional health care services using any device. HealthPlus ePharmacy is truly a ‘one-stop shop’ experience for health care services including telemedicine and laboratory services in partnership with healthcare providers such as MeCure.

In explaining the specialist nature of the ePharmacy platform, Chief Transformation Officer, Chidi Okoro also remarked that “our intention is to become the leading point of care for medicine use review, prescriptions management and pharmacist consultation services, by providing seamless end to end user experience. We will also be constantly updating our content with helpful information, articles, blogs, newsletters and company announcements.”

Amongst the new features, such as the “Speak To A Pharmacist” chat button on the site, the ePharmacy platform is interactive and gives better access to foster improved communication with our patients and customers. ‘

Afsane Jetha, CEO of Alta Semper Capital LLP, HealthPlus’s private equity investment partner, believes that this is another great stride in improving healthcare delivery in Nigeria by providing access to high-quality yet affordable medical and beauty supplies through a new and innovative platform. “We remain strongly committed to supporting the company strategically and financially in the years to come,” he assured.

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YouTube To Generate Over $280 Million From US Premium Subscribers In 2021

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YouTube Premium is starting to generate sustainable revenues from its paid ad-free subscription services. It took more than six years since relaunch to see significant growth. 

A recent report projects that with an estimated 23.6 million unique users by the end of 2021, revenues are expected to climb to $282.96 million in the US alone, representing an impressive +18% Year-Over-Year (YoY) growth.

Premium subscriptions are projected to top 25 million unique users by the end of next year, exceeding $300 million in revenues. By the end of 2024, totalling $334.52 million with nearly 28 million sign-ups. The projected revenues are expected to keep a steady growth after 2023.

Video streaming services are gaining popularity, growth accelerated by the COVID-19 pandemic

In addition to promising growth in the US, YouTube Premium services reached 50 million subscribers globally since September, beating an important milestone. YouTube Premium’s recent success can be attributed to both Covid-related, as well as non-Covid-related factors.

The global video streaming market is expected to expand at a 21% growth rate between 2021 and 2028 – highly driven by the increase in smartphone and internet usage. Live-streaming, music streaming, the adoption of cloud-based solutions could all be contributing factors.

The HelpCenter app’s co-founder Ernestas Petkevicius commented on the continuous growth of YouTube Premium:

“YouTube is playing in its own category. I do not see any competition for user-generated content which is now the main driver of tutoring, know-how, and news/comments. YouTube has lots of quality content and an army of creators who rely on the platform as their main source of income. Music services and ad-free mode are only an extra catalyst for revenue growth. YouTube has no competitors when it comes to these services, therefore, the revenue numbers potentially could be much bigger.”

In terms of market shares, 39% of the video streaming market is found to be driven by the US and Canada, which would explain the US-driven revenue growth of 18% Year-over-Year (YoY). What is more, subscription-model accounted for 43% revenue share of the total video streaming services in 2020.

Music streaming is another possible factor for revenue growth from premium sign-ups. Music streaming market in isolation is expected to reach a good 9.8% growth between 2021 and 2027.

And even though video streaming was popular prior to the pandemic, the extreme acceleration in growth has been due to the COVID-19 crisis. As many countries declared nationwide lockdowns, people stayed home more, thus increasing the use of digital services like social media, as well as online video streaming. Consumer engagement on social media video sharing platforms like YouTube grew significantly.

Whether this growth is driven by the all-encompassing features (ad-free videos, YouTube TV, music streaming for $11.99), changes in the consumer behavior, or technological advancements, revenues from YouTube Premium subscriptions in the US are expected to keep growing at a steady rate.

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